What are the Qualitative Characteristics of accounting information within IFRS?

Relevance & Faithful Representation

Faithful RepresentationIncludes:Completeness - Nothing omitted that would impact the decision-making of a userNeutrality - Information is presented is without biasFree from Error - No material errors or omissions

7

What are the Enhancing Characteristics of IFRS?

Comparability - Allows users to compare different items among various periods Verifiability - Different people would reach a similar conclusion on the information presented Timeliness - Information is made available early enough to impact the decision making of users Understandability - Information is easy to understand

8

How does comparability differ under GAAP versus IFRS?

Comparative information from prior year is required under IFRS.

GAAP requires that if multiple years are presented they are consistently prepared however it doesn't require prior year comparative statements.

9

What is the Pervasive Constraint within IFRS?

Cost vs. Benefit

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Which items are considered reporting elements under IFRS?

AssetLiabilityEquityIncomeExpense

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What are the criteria for recognition on IFRS financial statements?

Probable future economic benefit

Can be measured reliably

If the value or outcome cannot be measured reliably IFRS requires the use of the Cost Recovery Method.

12

When transitioning to IFRS what type of financial statement must be produced for the first reporting period?

A full comparative statement using IFRS.

13

If IFRS was implemented in June 2012 for use in the December 31 2012 financial statements what is the Date of Transition?

January 1 2011 because a full year of comparative statements is required from the previous year

14

For Property Plant and Equipment which election is the most efficient method for converting assets to IFRS?

The Fair Value election

15

Where on the financial statements are adjustments for adopting to IFRS made?

In the entity's retained earnings or equity

16

How is going concern different under IFRS than from GAAP?

Going Concern is an assumption under IFRS

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How are extraordinary items treated under IFRS?

IFRS doesn't allow extraordinary items.

18

How is the completed contract method used under IFRS?

Completed contract method is not allowed under IFRS.

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How is LIFO treated under IFRS?

IFRS does not allow LIFO.

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Which financial statements are required under IFRS?

Statement of Comprehensive Income

Statement of Changes in Equity

21

How is the term income used in IFRS?

Income is used instead of revenue and encompasses BOTH revenue and gains.

22

How is the term profit used in IFRS?

In IFRS the term profit is used instead of Net Income.

23

How does IFRS treat gains?

They are treated the same as revenue and are not separated on the financial statements.

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How does IFRS treat losses?

In IFRS losses are treated the same as expenses but they ARE separated on the financial statements.

25

How does refinancing of current liabilities to long-term liabilities under IFRS differ from GAAP?

Under IFRS current liabilities can only be refinanced into a non-current liability if the refinance agreement is EXECUTED prior to the balance sheet date.

GAAP requires only *intent* to refinance not actual execution.

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How do contingent liabilities differ between GAAP and IFRS?

Under GAAP there are three classifications of contingent liabilities - Probable Reasonably Possible and Remote.

Under IFRS contingencies are uncertain future events and are classified as a provision if probable and measurable even if uncertain in timing or amount.

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How are bonds recorded under IFRS?

Bonds may be recorded on the Statement of Financial Position using one of two methods

Fair Value through profit or loss *Liability revalued at the end of each period*Gain or Loss recognized in period

Amortized Cost*Using Effective Interest Method

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How are deferred taxes treated under IFRS?

They use the liability method - all deferred tax liabilities must be reported but only probable deferred tax assets can be reported.